Question
Swift Skateboards sells unassembled skateboards for $65 each. Variable production costs for each board are $10 and fixed production costs are $18. Swift is considering
Swift Skateboards sells unassembled skateboards for $65 each. Variable production costs for each board are $10 and fixed production costs are $18. Swift is considering selling the skateboards fully assembled for $72 each. It estimates variable costs for assembling one board will be $3 and fixed costs will be $7. In order for the assembled boards to be more profitable than the unassembled boards, Swift must either
A : increase the sale price of the assembled boards by at least $3 or decrease the fixed costs of assembling the boards by at least $7.
B : increase the sale price of the assembled boards by at least $7 or decrease the variable costs of assembling the boards by at least $3.
C : increase the sale price of the assembled boards by at least $3 or decrease the costs of assembling the boards by at least $3.
D : increase the sale price of the assembled boards by at least $7 or decrease the fixed costs of assembling the boards by at least $7.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started